Fed Shoveling Our Money To Thieving Banks

And you thought it was bad on Friday when the Fed gave Bear Stearns $200,000,000 of our money. Today -- a Sunday! -- they gave J.P. Morgan $30 billion, yes, $30,000,000,000 of our money to subsidize a deal to take over Bear Stearns. Public money for a private buyout. To protect the shareholders. You know the Bushies's aren't going to go back and, I don't know, bankrupt the morons who drove the company into bankruptcy. That might interrupt their time at the country club, or at the bridge tables:

Last year, when he was still chief executive of Bear Stearns Cos., James Cayne took heat for hitting the bridge circuit during troubled times for his firm. Will the same rules apply to Cayne now that he’s chairman?

We’ll soon find out. Thursday and today, as Bear fought off a pending cash crisis that threatened to ruin its business, Mr. Cayne – who relinquished his CEO title in January and become the firm’s non-executive chairman – has been in Detroit, playing in the North American Bridge Championship.

So far, he’s faring better than his firm. In the “Imp Pairs” event Thursday, Mr. Cayne and a partner placed fourth out of 130, according to figures from the American Contract Bridge League web site. (Bear shares fell 7%.) The playing took place between about 1 p.m. and 5 p.m. in the afternoon and 7:30 to 11 p.m. in the evening, say insiders – a period in which Bear CEO Alan Schwartz convened a series of conference calls with directors, according to people familiar with the matter, to discuss a pending cash pledge from J.P. Morgan Chase & Co. and the Federal Reserve Board. Still, Mr. Cayne participated in at least some of the dialogue, said one of these people.

Brings to mind Nero fiddling while Rome burns, doesn't it?

Times (uk): Bear Stearns sold to JPMorgan Chase under Federal Bank pressure

America's Federal Reserve last night orchestrated a rescue takeover of Bear Stearns, the stricken Wall Street investment bank, by JP Morgan Chase in an unprecedented move to prevent the implosion of the US financial system.

In New York last night, JP Morgan Chase announced that it is to buy Bear Stearns for $240 million in shares - representing 6 per cent of the struggling bank's closing market value on Friday, and just 1 per cent of the group's capitalisation at the beginning of the month.

As part of the deal, America's central bank has effectively underwritten $30 billion worth of Bear's toxic sub-prime mortgage-backed bonds, to protect JP Morgan Chase shareholders. It is also providing special financing to JP Morgan Chase - of an undisclosed sum. Terms of the deal are unknown, and it is not clear whether such special financing is to cover the cost of JP Morgan's emergency loan to Bear made late on Thursday night.

Greg Palast says this is why the feds really jumped all over Eliot Spitzer's bones last week. Spitzer opposed giving the robber barons free reign to bankrupt homeowners while they make billions. So he had to go:

While New York Governor Eliot Spitzer was paying an ‘escort’ $4,300 in a hotel room in Washington, just down the road, George Bush’s new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.

Both acts were wanton, wicked and lewd. But there’s a BIG difference. The Governor was using his own checkbook. Bush’s man Bernanke was using ours.

This week, Bernanke’s Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banks’ mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure.

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When the housing bubble burst and the paint flaked off, investors were left with the poop and the bankers were left with bonuses. Countrywide’s top man, Angelo Mozilo, will ‘earn’ a $77 million buy-out bonus this year on top of the $656 million - over half a billion dollars – he pulled in from 1998 through 2007.

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But there were rumblings that the party would soon be over. Angry regulators, burned investors and the weight of millions of homes about to be boarded up were causing the sharks to sink. Countrywide’s stock was down 50%, and Citigroup was off 38%, not pleasing to the Gulf sheiks who now control its biggest share blocks.

Then, on Wednesday of this week, the unthinkable happened. Carlyle Capital went bankrupt. Who? That’s Carlyle as in Carlyle Group. James Baker, Senior Counsel. Notable partners, former and past: George Bush, the Bin Laden family and more dictators, potentates, pirates and presidents than you can count.

The Fed had to act. Bernanke opened the vault and dumped $200 billion on the poor little suffering bankers. They got the public treasure – and got to keep the Grinning’s house. There was no ‘quid’ of a foreclosure moratorium for the ‘pro quo’ of public bailout. Not one family was saved – but not one banker was left behind.

Every mortgage sharking operation shot up in value. Mozilo’s Countrywide stock rose 17% in one day. The Citi sheiks saw their company’s stock rise $10 billion in an afternoon.

And that very same day the bail-out was decided – what a coinkydink! – the man called, ‘The Sheriff of Wall Street’ was cuffed. Spitzer was silenced.